Mind the Gap: The Impact of Budget Constraints on Ontario's Net Zero Plans

May 9, 2024
  • Climate change’s urgency demands that rigorous cost-benefit analysis be performed on each energy transition expenditure. This publication calculates if there is a potential funding shortfall for Ontario’s net zero targets relative to its current cost projections and the available sources to pay for it.
  • Under an aggressive adoption scenario, annual available funding in Ontario totals $14.2 billion against an annual need of $29.0 billion – resulting in a potential shortfall of $14.8 billion. Meanwhile, an extreme scenario shows a shortfall of $6.1 billion with available funding for Ontario’s net zero goals totaling $19.0 billion against an annual need of $25.1 billion.
  • Budget constraints for clean energy investments are real and need to be considered in policy design. This suggests the need for a strong focus on least-cost planning, retaining optionality in system buildout, and sober thinking with regards to the expected pace of heating and transportation electrification.